Flood Insurance

Flood damage is one of the most common and costly disasters in the United States. Flooding can occur almost anywhere, even if you do not live in a high-risk area known as a “special hazard flood zone.”

It is important that homeowners, renters and business owners evaluate their risks and take steps to protect their homes and businesses from flooding. One way to manage your risks is to purchase additional insurance to cover damage caused by flooding.

Resources:

What is “flooding”?

Flood, as used in the Standard Flood Insurance Policy issued by the National Flood Insurance Program (NFIP), is defined as:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is your property) from: a. Overflow of inland or tidal waters; b. Unusual and rapid accumulation or runoff of surface waters from any source; or c. Mudflow.
or
Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels which result in a flood.

What causes flooding in Maryland?

According to the Maryland Emergency Management Agency (MEMA), “Maryland is subject to flooding from several different sources. Flash floods tend to come after short periods of heavy rain and most often affect small streams and creeks. General flooding comes from more prolonged steady rain and tends to affect larger streams and rivers.

Major rivers such as the Potomac and Susquehanna often reach flood stages because of events in distant areas of their watershed. Finally, hurricanes and tropical storms can cause surges that create tidal flooding along Maryland’s bays and their tributaries.”

How can I find out if my neighborhood is at risk for flooding?

Flood risk maps identify areas that are at risk of flooding. You can search flood risk maps using the Flood Risk Application available on MEMA’s website, https://mema.maryland.gov/Pages/flood-Prone-Zones.aspx.

You can also look up your area on the Digital Flood Insurance Risk Maps (DFIRM) available on the Maryland DFIRM website, https://mdfloodmaps.net/. Be advised that many flood insurance damage claims are filed in areas that are not designated high risk flood zones.

Why do I need flood insurance?

Generally, flood damage is not covered by a homeowners or renters insurance policy. But you can purchase a separate flood policy if you want coverage.

If you have a federally backed mortgage and live in a special flood hazard zone, federal law requires that you have flood insurance. But, even if you are not required to purchase flood insurance because, for example, you do not reside in a high risk flood zone, you own your home outright, or you are a renter, you may still wish to buy flood insurance to protect yourself from damage caused by flooding. Flooding can happen at any time or in any place. You can go to several sites to find out your risk such as: https://mema.maryland.gov/Pages/flood-Prone-Zones.aspx. You can also look up your area on the Digital Flood Insurance Risk Maps (DFIRM) available on the Maryland DFIRM website, https://mdfloodmaps.net/. Visit www.floodsmart.gov to determine your cost.

Who can buy flood insurance?

Flood insurance is available to homeowners, renters and business owners in most communities in Maryland; even those that do not live in a special hazard flood zone.

Where can I purchase flood insurance?

You can purchase a flood insurance policy:

From the National Flood Insurance Program (NFIP) if your property is located in a community that participates in NFIP. Flood insurance policies that are issued through the NFIP are regulated by the federal government, although they are frequently sold by private insurance companies. Go to www.floodsmart.gov to find out more;
in the private market. A list of authorized insurers that sell private flood insurance in Maryland is available HERE. These insurance policies are regulated by the Maryland Insurance Administration. If your home or business is in a special hazard flood zone and you have a mortgage, it is a good idea to check with your lender to confirm that the private flood insurance product you are considering will fulfill the mandatory purchasing requirement of your lender; or
from a surplus lines insurer. The Maryland Insurance Administration has very limited jurisdiction and regulatory authority over surplus lines insurers.

If you are considering purchasing a flood policy, it is a good idea to talk with a trusted insurance producer (agent or broker) to make sure you understand what the policy covers. If your mortgage lender requires flood insurance as a condition of your loan, you may also want to check with your lender to make certain that the policy satisfies the lender’s requirements.

How do I purchase private flood insurance?

A list of authorized insurers that sell private flood insurance in Maryland is available HERE.

Talk with a trusted insurance producer (agent or broker) to make sure you understand what the policy covers. You also should talk with your lender to make certain that it satisfies the lender’s requirements.

What type of coverage is available from the NFIP for your home?

NFIP policies offer two types of coverage: (1) building coverage, and (2) contents coverage. NFIP building coverage cover up to $250,000 of flood damage to a home's structure, including, for example:

Damage to the furnace, water heater, central air conditioner and permanently installed carpet over unfinished flooring
Debris removal and clean up

For more information about items that are covered under NFIP building coverage, ask your producer or visit, www.floodsmart.gov.

Personal property inside your home is not included with the coverage for the building. Personal property includes personal belongings such as clothes, washer, dryer, television, or furniture. However, contents coverage is available up to $100,000 for an additional premium.

The flood insurance policy provides limited coverage for items in a basement. Go to www.floodsmart.gov/flood-insurance/coverage or contact your insurance producer to find out more.

What is surplus lines coverage?

Surplus lines insurers are non-admitted insurers, which means that the Maryland Insurance Administration (MIA) has limited regulatory authority over their actions. While the MIA does regulate the claim handling activities of surplus lines insurers, surplus lines policies are not backed by the Maryland Guaranty Fund and you cannot file a claim with the Fund if the insurer is unable to pay your claim.

Also, surplus lines insurers do not file their policy forms with the MIA for approval. Surplus lines coverage may be a good option if you have trouble finding a policy through the NFIP or a private insurer that fits your needs.